Personal Finance

Food prices are on the rise, but you can still save money on groceries. Here are 5 ways how

Key Points
  • Consumers saw food prices rise again last month and notch the largest 12-month increase since 1981.
  • Here are a few ways to shield yourself from sticker shock at the supermarket and some free apps that will get your cash back.
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Supply chain issues and labor shortage hitting grocery stores

Going to the grocery store is taking a bigger bite out of your budget.

Consumers saw food prices rise another 1% in February compared with a month earlier and 7.9% compared with the year-ago period, marking the largest 12-month increase since 1981, according to the consumer price index.

It's not just staples like fruit, milk, eggs and meat that are getting more expensive; inflation has led many food and beverage companies to raise prices on your favorite packaged goods, as well (or make the actual package smaller). 

Tyson Foods, Coca-Cola and PepsiCo announced price increases, citing more supply chain and labor problems. Even Oreo cookies, Ritz crackers and Sour Patch Kids cost more — thanks to a 7% price hike in the beginning of the year.

To avoid getting gouged on groceries, here are a few pro tips to either cut costs or get more cash back:

1. Use a cash-back app 

Ibotta and Checkout 51 are two of the most popular apps for earning cash back at the store, according to Julie Ramhold, a consumer analyst at DealNews.com. The average Ibotta user earns between $10 and $20 a month, but more active users can earn as much as $100 to $300 a month, a spokesperson told CNBC.

You can also earn cash back for online grocery orders with CouponCabin.com (there's a free app, as well as the browser extension), which is offering up to $6 back at Instacart, 2% back at Vons, 1% back at Kroger and 5% back at Seamless, advised consumer savings expert Andrea Woroch.

If you've already done your shopping, snap pictures of your grocery receipts using an app like Fetch Rewards to earn points that are good toward free gift cards at stores such as Target or Walmart and can offset future grocery purchases, Woroch suggested. 

2. Plan out your meals

This tried-and-true technique helps your edit down your shopping list to your weekly essentials and save a lot of money along the way.

When you plan your meals in advance, you're more likely to just buy the things you need, said savings expert Lisa Thompson at Coupons.com. If planning's not your thing, at least go shopping with a rough idea of what you'll be cooking in the week ahead to help stay on track and avoid impulse purchases, she added.

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Give your budget an extra boost by planning around whatever is the weekly special, Ramhold at DealNews.com advised. "Doing so will help you save money and may even help to broaden your recipe repertoire and get you out of a meal rut."

Consider trying a few generics at a time.
Julie Ramhold
consumer analyst at DealNews.com

3. Buy store brands

Generic brands are usually much cheaper than their "premium" counterparts and just as good, according to Ramhold. "If you don't have a preference, it'll be an easy switch, but if you do, consider trying a few generics at a time to see if there are any you won't mind switching to."

Be open to trying new products, even if it means a break from your favorite laundry detergent or your coffee creamer, Thompson added.

"Maybe you'll discover some new products you love that cost less in the process."

4. Shop strategically

Hass avocados are displayed in the produce section at a United Market on Feb. 7, 2022 in San Anselmo, California.
Justin Sullivan | Getty Images

When it comes to the rest of the items on your list, you can save more by buying in bulk, choosing some frozen vegetables over fresh or nonorganic where you can. Joining a wholesale club such as Costco or BJ's will often get you the best price per unit on those items you can stockpile.

Then, keep your pantry organized, with food closer to expiration in front so you know to cook or consume them before they go bad, said Woroch.

You can even use a site like Cooklist.com to find new recipes using ingredients you already have at home, she said.

5. Pay with the right card

Stick to paying with the credit card that gives you the most back on groceries, or invest in a new grocery rewards card, Woroch suggested.  

While a generic cash-back card like the Citi Double Cash Card can earn you 2%, there are specific grocery rewards cards that can earn you up to 6% back at supermarkets nationwide – like the Blue Cash Preferred Card from American Express.

(CNBC's Select has a full roundup of the best cards for food shopping along with the APRs and annual fees.)

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